Supplementary evidence submitted by BERR
(POS 1A)
Thank you for your letter of 4 December following
up on a number of points which were raised during the Westminster
Hall debate of 29 November on the Committee's two reports earlier
in the year on the post office network.
In your points on the future of the post office
network, you asked about the monitoring of adherence to the access
criteria by Post Office Ltd beyond the completion of the current
network change programme. As you will know, the Government has
decided on 1 October 2008 as the vesting date for the new consumer
body which will replace the National Consumer Council, Postwatch
and Energywatch. By then, there will only be one area plan to
complete the local public consultation (Herefordshire, Worcestershire
and West Midlands covering both our constituencies) and a further
three area plans for which final decisions are still to be announced.
Postwatch's role in the network change programme will thus be
almost complete by 1 October. But arrangements are in place to
ensure that sufficient continuity of resources remains available
to allow the Postwatch role in reaching any residual decisions
or completing any outstanding review cases to be fully discharged.
For the longer term, it will be for the new "National Consumer
Council" to decide on the detailed arrangements for monitoring
the network's compliance with the access criteria in consultation
with Post Office Ltd.
You also asked about the minimum size of the
network needed to meet the access criteria. My response to your
written Parliamentary question on 18 December explained that Post
Office Ltd currently estimates that the minimum size of network
necessary to meet the access criteria is around 7,500 offices.
But I would again emphasise that it is Government policy to maintain
a sustainable network of around 11,500 post offices and the £1.7
billion funding package announced on 17 May supports the network
at that level to 2011. The access criteria set a minimum floor
for the network size and Post Office Ltd are being asked to undertake,
consultation with Postwatch, an updated study and analysis of
the minimum number of post offices required to meet the access
criteria.
You asked about cost data availability in the
context of local initiatives to maintain a post office provision.
Post Office Ltd is currently putting in place a process for responding
to serious expressions of interest in maintaining post office
service provision at specific offices by means of community or
local government funding. Under this process they will provide
information on the costs which would need to be covered and the
terms and conditions which a contract for continued operation
of that office would need to cover. These include provision of
suitable premises and employment of a Post Office approved sub-postmaster,
guaranteed funding until at least 2011 of fixed ongoing costs
and any set up costs. Where a firm proposal for local funding
then emerges, Post Office Ltd will delay physical closure of the
existing branch in that locality for a stipulated period to allow
both funding and a contract to be put in place. Two recent area
plan decision booklets (for Hampshire and isle of Wight and Greater
Glasgow, Central Scotland, Argyll and Bute) include examples of
closure decisions where implementation of the closure will be
delayed by three months to allow further time to develop and assess
the viability of a local funding proposal.
With regard to the total number of closures
nationally, there is some flexibility around the figure of up
to 2,500, it is not a target Post Office Ltd must reach in all
circumstances. The key driver for Post Office Ltd is to stay within
the funding envelope for network change, if they leave more offices
open their cost pressures will increase. And in addition to the
funding constraints, the future sustainability of many of the
remaining offices is closely tied to the migration of custom from
nearby offices which have closed. This is why Post Office Ltd
reserves the right to identify an alternative office for closure
where a proposed closure does not proceed following careful consideration
of the consultation responses. Such an approach is not however
inevitable as Post Office Ltd may, for example, propose an outreach
service rather than its original outright closure proposal. But
where an alternative closure proposal is made, Post Office Ltd
will hold a further six week local consultation on the new proposal
and there would not be more than one such additional set of proposals
in the area covered by each plan.
Within the total investment package announced
by the European Commission, in November, it is not yet possible
to give an exact amount for compensation to sub-postmasters as
this will depend on which branches close but we expect that compensation
payments will account for up to £180 million.
Finally, with regard to the Post Office card
account re-tendering process, this is a matter for the Department
of Work and Pensions but I understand that it remains their expectation
that decisions on the new card account arrangements will be reached
later this year.
17 January 2008
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